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Preparation of Civil Aviation Sector Strategy (Financed by the Technical Assistance Fund)

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Preparation of Civil Aviation Sector Strategy (Financed by the Technical Assistance Fund) Technical Assistance Consultant’s Report Project Number: 38348 November 2006 Nepal: Preparation of Civil Aviation Sector Strategy (Financed by the Technical Assistance Fund) Prepared by TA Consultant Team (Individual Consultants) For Civil Aviation Authority of Nepal This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design. TA-4772 (NEP): PREPARATION OF CIVIL AVIATIONSECTOR STRATEGY Volume I: Sector Strategy, Sector Management Plan and ADB Investment 2 '1 NOV 2006 FINAL REPORT November 2006 TA 4772 - (NEP) Preparation of Civil Aviation Sector Strategy Volume 1: Sector Strategy, Sector Management Plan and AD6 Investment Contents 1 Executive Summary 5 1.1 Overview ........................................................................................................... 5 1.2 Strategy ...................................................................................................................... 6 . 1.3 Appllcatlon .................................... ....................... .. ............................................. 7 2 Introduction 9 2.1 Background ................................................................................................................ 9 2.2 Structure of the Report ....................... :..:.............................................................. 9 Industry Overview 10 Legislative Framework ........................ .......... ........................ ... ................ ............., . I0 Policy Framework ............................................................... ................................ 11 Tenth Five Year Plan 11 National Transport Policy 2001 12 National Aviation Policy 2050 12 Sector Management. ... ......................................................... ............... ........ 13 Ministry of Culture, Tourism and Civil Aviation 13 Civil Aviation Authority of Nepal 13 Responsibilities 13 Traffic Forecast Overview ..................................................... ................................... I4 ADB (2006) Forecasts 15 International Air Traffic Forecasts 15 International Passengers 15 International Cargo 16 International Aircraft 16 International Mail 17 Comparison of AD6 (2006) International Forecasts with Previous Forecasts 17 International Passenger Forecasts 17 International Cargo Forecasts 18 Domestic Air Traffic Forecasts 18 Domestic Passengers 18 Domestic Cargo 19 Domestic Aircraft 19 Domestic Mail 2 0 Comparison of ADB (2006) Domestic Forecasts with Previous Forecasts 2 0 Dornestic Passenger Traffic Forecasts 2 0 Domestic Cargo Traffic Forecasts 2 1 CAAN Financial Performance ............................................... ................................... 22 Income: 2 2 Overall Financial Performance 2 3 Financial Ratios 2 3 Long Term Loan and Interest Expense 24 Accuracy of Data 2 4 Airlines ...................................................................................................................... 24 Air Services Agreements Status ....... ................. 25 Donor Support and Programs .................................................................................. 25 TA 4772 .(NEP) Prcparalion of Civil Avialion Sector Slralegy Volume 1: Sector Strategy. Sector Management Plan and ADB Invest~nent 4 Sector Analysis and Strategic Objectives 2 6 4.1 Introduction .............................................................................................................. 26 4.2 Situational Analysis (SWOT) .................................................................................... 26 4.3 Assessment .............................................................................................................. 29 4.4 Relationship to ADB Sector Strategy ....................................................................... 29 5 The Sector Strategy 3 1 5.1 The Strategic Plan .................................................................................................... 31 5.2 Outcomes ................................................................................................................. 33 5.3 Purpose and Principles ............................................................................................ 33 5.4 Assumptions .............................................................................................................33 5.5 . Managing the Strategy ............................................................................................. 33 Sector Management Plan 35 Introduction ....................:......................................................................................... 35 Methodology .............................................................................................................35 Task Scheduling .......................................................................................................37 Task Descriptions ............... .. .............................................................................. 38 Strategic Objective 1: An effective institutional framework 38 Strategic Objective 2: A sustainable, viable, competitive and fair market 46 Strategic Objective 3: A modern, safe and secure operating environment 54 Next Steps ................................................................................................................ 61 ADB Investment 6 3 TIA Development ..................................................................................................... 64 Infrastructure Sizing 64 Planning Review and Rationale 6 5 Phase 1: 2008-2012 67 Phase 2: 2013 .2017 67 Cost Summary 6 8 Technical Assistance ............................................................................................... 71 PPTA Terms of Reference 72 Background ..............................................................................................................72 Objectives and Scope .............................................................................................. 74 Terms of Reference ................................................................................................. 74 Feasibility and Compliances 7 5 Capacity Building 77 Counterparts ............................................................................................................ 79 Outcomes ..........................................................................................................79 Reporting .................................................................................................................. 79 TA 4772 .(NEP) Preparation of Civil Aviation Sector Strategy Volume 1: Sector Strategy. Sector Management Plan and ADB Investment 9 Appendices 8 0 Appendix A: Terms of Reference NEP-4772 ...............................................................................80 Appendix B: National Aviation Policy 2050 ................................................................................. 83 Appendix C: References ..............................................................................................................88 Appendix E: Project Coordination Committee Members and Study Team.................................. 94 Appendix F: Persons Consulted With ..........................................................................................95 Appendix G: AOC Status ........................................................................................................... 100 TA 4772 .(NEP) Preparation of Civil Aviation Sector Strategy Volume 1: Sector Strategy. Sector Management Plan and ADB Investment List of Figures Figure 1: Policy and Planning Framework ...............................................................................11 Figure 2: MOCTCA Structure ..................................................................................................13 Figure 3: CAAN Functional Structure ......................................................................................14 Figure 4: Summary of International Traffic Forecasts ........................................................... 15 Figure 5: International Passenger Forecast ...........................................................................15 Figure 6: International Cargo Forecast .................................................................................... 16 Figure 7: International Air Transport Movement Forecast ...................................................... 16 Figure 8: International Mail Forecast ....................................................................................... 17 Figure 9: Comparison of International Passenger Forecasts .................................................. 17 Figure 10: Comparison of International Cargo Forecasts .......................................................18 Figure 11 : Summary of Domestic Traffic Forecasts ................................................................ 18 Figure 12: Domestic 'Passenger Forecast ............................................................................... 19 Figure 13: Domestic Cargo Forecast .......................................................................................19 Figure 14: Domestic Air Transport Movement Forecast ..........................................................20 Figure 15: Domestic Mail Forecast .........................................................................................
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